Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

The case involves a consumer class action against Premier Nutrition Corporation, which marketed Joint Juice, a dietary supplement drink, as effective for relieving joint pain. Mary Beth Montera, representing a class of New York consumers, alleged that Premier's advertising was deceptive and violated New York General Business Law (GBL) §§ 349 and 350. These laws require proof that the defendant engaged in consumer-oriented conduct that was materially misleading and caused injury to the plaintiff.The United States District Court for the Northern District of California certified the class and the case proceeded to trial. Montera presented evidence, including studies showing that Joint Juice's key ingredients, glucosamine and chondroitin, were ineffective for joint health. Premier countered with industry-funded studies supporting the product's efficacy. The jury found Premier's statements deceptive and awarded statutory damages based on the number of units sold in New York during the class period. Premier's post-trial motions to decertify the class and for judgment as a matter of law were denied.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court affirmed the district court's rulings on class certification, liability under GBL §§ 349 and 350, and the initial calculation of statutory damages. The court rejected Premier's arguments that its statements were not materially misleading and that Montera's injury was not cognizable under New York law. The court also upheld the jury's finding that the class members' injuries were caused by Premier's misrepresentations.However, the Ninth Circuit vacated the district court's award of prejudgment interest, ruling that statutory damages under GBL §§ 349 and 350 are not compensatory and thus do not warrant prejudgment interest. The court also remanded the case for the district court to reconsider the statutory damages award in light of the factors identified in Wakefield v. ViSalus, Inc., which addresses the substantive due process limits on aggregate statutory damages. The court affirmed in part, reversed in part, and vacated and remanded in part. View "MONTERA V. PREMIER NUTRITION CORPORATION" on Justia Law

Plaintiff, a Bank of America (BOA) accountholder, was charged two separate out-of-network (OON) balance inquiry fees when using a non-BOA ATM. She claimed that only the first fee was permissible under the contract, arguing that a "balance inquiry" should be defined as a customer-initiated request for balance information. BOA contended that it could charge a fee whenever an ATM transmitted a balance inquiry request, regardless of the customer's actions.The United States District Court for the Southern District of California granted summary judgment in favor of BOA on both the breach of contract and breach of the implied covenant of good faith and fair dealing claims. The court also denied class certification, reasoning that individual issues predominated over common ones, particularly concerning the subjective intent of each class member and variations in ATM prompts.The United States Court of Appeals for the Ninth Circuit reversed the district court's summary judgment on the breach of contract claim, agreeing with the plaintiff that a "balance inquiry" should be defined as a customer-initiated transaction. The court found that BOA's interpretation, which allowed fees based on ATM transmittals, was unreasonable and not supported by the contract's language. The court affirmed the summary judgment on the implied covenant of good faith and fair dealing claim, as it was indistinguishable from the breach of contract claim. The court also affirmed the district court's decision that the plaintiff's failure to follow pre-dispute procedures did not bar her claim.The Ninth Circuit vacated the denial of class certification and remanded the case for reconsideration, noting that the court's interpretation of "balance inquiry" alleviated concerns about the need to probe the subjective intent of individual class members. View "Schertzer v. Bank of America, NA" on Justia Law

The case involves a putative class action brought by the plaintiff against Kimberly Clark Corp., alleging that the labeling of the defendant's baby wipes was misleading under California's false advertising laws. The plaintiff claimed that the terms "plant-based wipes" and "natural care®" on the front label, along with nature-themed imagery, suggested that the wipes contained only natural ingredients without chemical modifications. However, the wipes contained synthetic ingredients.The United States District Court for the Central District of California separated the product labels into two categories: those with an asterisk and a qualifying statement ("Asterisked Products") and those without ("Unasterisked Products"). The district court dismissed the plaintiff's claims, concluding that both categories were not misleading as a matter of law. The court reasoned that the asterisk and qualifying statement on the Asterisked Products clarified that the wipes were not entirely plant-based, and the back label's disclaimer about synthetic ingredients dispelled any potential misrepresentation for both categories.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court reversed the district court's dismissal of the plaintiff's claims regarding the Unasterisked Products, holding that the front label could plausibly mislead a reasonable consumer to believe the wipes contained only natural ingredients, precluding reliance on the back label at the pleadings stage. However, the court affirmed the dismissal of claims regarding the Asterisked Products, finding that the asterisk and qualifying statement, along with the back label, made it impossible for the plaintiff to prove that a reasonable consumer would be deceived. The court also rejected the defendant's argument that the complaint failed to meet the particularity requirements of Rule 9(b). The case was remanded for further proceedings consistent with the court's opinion. View "WHITESIDE V. KIMBERLY CLARK CORP." on Justia Law

The case involves three sets of plaintiffs who filed class-action lawsuits against their healthcare provider, Cedars-Sinai Health System and Cedars-Sinai Medical Center. The plaintiffs alleged that Cedars-Sinai unlawfully disclosed their private medical information to third parties through tracking software on its website. Cedars-Sinai removed the suits to federal court, arguing that it developed its website while acting under a federal officer and at the direction of the federal government.The district court disagreed with Cedars-Sinai's argument. It held that Cedars-Sinai developed its website in compliance with a generally applicable and comprehensive regulatory scheme and that there is therefore no federal jurisdiction under § 1442(a)(1). The court found that although Cedars-Sinai’s website furthers the government’s broad goal of promoting access to digital health records, Cedars-Sinai’s relationship with the federal government does not establish that it acted pursuant to congressionally delegated authority to help accomplish a basic governmental task.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s orders remanding the removed actions to state court. The court agreed with the district court that Cedars-Sinai developed its website in compliance with a generally applicable and comprehensive regulatory scheme under the Health Information Technology for Economic and Clinical Health Act, and that there was therefore no federal jurisdiction under § 1442(a)(1). The court concluded that Cedars-Sinai did not meet § 1442(a)(1)’s “causal nexus” requirement. View "Doe v. Cedars-Sinai Health System" on Justia Law

The case involves Gillian and Samuel Davidson, who filed a class action lawsuit against Sprout Foods, Inc., alleging that the labels on Sprout's baby food pouches violated California's Sherman Law, which incorporates all federal food labeling standards. The Davidsons claimed that Sprout's labels, which stated the amount of nutrients the pouches contained, were misleading and harmful to consumers.The district court dismissed the Davidsons' claims. It ruled that the Sherman Law claim was preempted by federal law, which only allows the federal government to enforce food labeling standards. The court also dismissed the Davidsons' fraud-based claims, stating that they failed to specifically allege why Sprout's products were harmful.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed in part and reversed in part. The court held that federal law did not preempt private enforcement of the Sherman Law's labeling requirements. The court reasoned that the federal food labeling statute permits states to enact labeling standards identical to the federal standards, which California has done through the Sherman Law. Therefore, the district court should not have dismissed the Sherman Law claims. However, the court affirmed the dismissal of the Davidsons' fraud-based claims, agreeing with the lower court that the Davidsons failed to meet the heightened pleading requirements for fraud. The court also reversed the dismissal of an unjust enrichment claim, which survived due to the reversal on the Sherman Law claim. View "Davidson v. Sprout Foods, Inc." on Justia Law

The case involves a putative class action of approximately 2,000 payees who received structured settlement annuities to resolve personal injury claims. The plaintiffs, Renaldo White and Randolph Nadeau, alleged that defendants Symetra Life Insurance Company and Symetra Assigned Benefits Service Company wrongfully induced them to cash out their annuities in individualized “factoring” arrangements, whereby they gave up their rights to periodic payments in return for discounted lump sums.The district court certified two nationwide classes under Federal Rule of Civil Procedure 23. The first class consisted of all persons who were annuitants of a structured settlement annuity (SSA) issued by Symetra and who subsequently sold to a Symetra affiliate the right to receive payments from that SSA in a factoring transaction. The second class was a subclass of the first, consisting of all members of the class whose contract defining the annuity at issue included language explicitly stating that the annuitants lack the power to transfer their future SSA payments.The United States Court of Appeals for the Ninth Circuit reversed the district court’s certification of the two nationwide classes. The court held that individual issues of causation will predominate over common ones when evaluating whether defendants’ acts and omissions caused the plaintiffs to enter factoring transactions and incur their alleged injuries. The court also held that the district court erred in certifying the nationwide subclass of plaintiffs whose original settlement agreements with their personal injury tortfeasors contained structured settlement annuity (SSA) anti-assignment provisions. The record indicates that the annuitants hail from a wide array of different states, and some of the settlement agreements have choice of law provisions denoting the law of a state other than the location where the contract was executed. The apparent variations in state law on the enforceability of anti-assignment provisions in SSAs and the need to apply multiple state laws to the subclass raised a substantial question of whether individual issues predominate and how the matter can be fairly managed as a class action. View "WHITE V. SYMETRA ASSIGNED BENEFITS SERVICE COMPANY" on Justia Law

The case involves Nicholas DeFries, a former conductor for Union Pacific Railroad Company, who was removed from his duties after failing color-vision testing. Prior to DeFries' removal, a class action lawsuit had been filed against Union Pacific by a group of employees, alleging that the company's fitness-for-duty program violated the Americans with Disabilities Act (ADA). DeFries qualified as a member of this class, but the class was later narrowed and then decertified by the Eighth Circuit. DeFries subsequently filed an individual lawsuit in the District of Oregon, raising claims similar to those in the class action.The District of Oregon concluded that the commencement of the class action had tolled the statute of limitations under American Pipe & Construction Co. v. Utah, but that the tolling ended when the class definition was voluntarily narrowed, making DeFries's claim untimely. DeFries appealed this decision.The Ninth Circuit Court of Appeals reversed the district court's decision. The appellate court found ambiguity in whether the definition of the certified class included color-vision plaintiffs like DeFries. The court concluded that this ambiguity should be resolved in favor of allowing DeFries to rely on American Pipe tolling. Therefore, DeFries was entitled to tolling as a member of the class until the Eighth Circuit issued the mandate for its decision reversing class certification, making his claim timely. The case was remanded for further proceedings. View "DeFries v. Union Pacific Railroad Co." on Justia Law

A class of individuals and businesses in Northern California, who paid health insurance premiums to certain health plans, sued Sutter Health, a healthcare system operator in the region. They alleged that Sutter abused its market power to charge supracompetitive rates to these health plans, which were then passed on to the class in the form of higher premiums. The case went to trial on claims under California’s Cartwright Act for tying and unreasonable course of conduct. The jury returned a verdict in favor of Sutter.The plaintiffs appealed, arguing that the district court erred by failing to instruct the jury to consider Sutter’s anticompetitive purpose and by excluding evidence of Sutter’s conduct before 2006. The United States Court of Appeals for the Ninth Circuit agreed with the plaintiffs. It held that the district court contravened California law by removing “purpose” from the jury instructions, and that the legal error was not harmless. The court also held that the district court abused its discretion under Federal Rule of Evidence 403 in excluding as minimally relevant all evidence of Sutter’s conduct before 2006. The court concluded that these errors were prejudicial and reversed the district court’s judgment, remanding the case for a new trial. View "SIDIBE V. SUTTER HEALTH" on Justia Law

A group of individuals, including a minor, filed a class action lawsuit against Warner Bros. Entertainment, Inc. for alleged misrepresentations related to the mobile application Game of Thrones: Conquest (GOTC). The plaintiffs claimed that Warner Bros. engaged in false and misleading advertising within the game. In response, Warner Bros. moved to compel arbitration of all claims based on the GOTC Terms of Service, which users agree to by tapping a “Play” button located on the app’s sign-in screen. The district court denied Warner Bros.' motion, finding that the notice of the Terms of Service was insufficiently conspicuous to bind users to them.The case was appealed to the United States Court of Appeals for the Ninth Circuit. The lower court had found that Warner Bros. failed to provide reasonably conspicuous notice of its Terms of Service, thus denying the motion to compel arbitration. The district court focused on whether the context of the transaction put the plaintiffs on notice that they were agreeing to the Terms of Service, concluding that the app did not involve a continuing relationship that would require some terms and conditions.The Ninth Circuit Court of Appeals reversed the district court's decision. The appellate court held that the district court erred in finding that Warner Bros. failed to provide reasonably conspicuous notice. The court found that the context of the transaction and the placement of the notice were both sufficient to provide reasonably conspicuous notice. The court also rejected the plaintiffs' argument that the arbitration agreement was unconscionable due to its ban on public injunctive relief. The court concluded that the unenforceability of the waiver of one’s right to seek public injunctive relief did not make either this provision or the arbitration agreement unconscionable or otherwise unenforceable. The case was remanded for further proceedings. View "KEEBAUGH V. WARNER BROS. ENTERTAINMENT INC." on Justia Law

The case involves a consumer class action against Nutramax Laboratories, Inc. and Nutramax Laboratories Veterinary Sciences, Inc. (collectively, “Nutramax”), alleging that Nutramax violated the California Consumers Legal Remedies Act by falsely marketing its pet health product, Cosequin, as promoting healthy joints in dogs. The plaintiffs, Justin Lytle and Christine Musthaler, claimed that Cosequin provided no such health benefits. The district court certified a class of California purchasers of certain Cosequin products who were exposed to the allegedly misleading statements.The district court had certified the class based on the proposed damages model of Plaintiffs’ expert, Dr. Jean-Pierre Dubé, to find that common questions predominated as to injury. Nutramax appealed, arguing that the district court erred in relying on an unexecuted damages model to certify the class and that the element of reliance was not susceptible to common proof.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The appellate court held that there was no general requirement that an expert actually apply to the proposed class an otherwise reliable damages model in order to demonstrate that damages are susceptible to common proof at the class certification stage. The court also rejected Nutramax’s contention that the district court incorrectly concluded that the element of reliance was susceptible to common proof. The district court properly found that classwide reliance may be established under the CLRA through proof that a misrepresentation is material. View "LYTLE V. NUTRAMAX LABORATORIES, INC." on Justia Law